Kenya’s biggest telecom company, Safaricom, is joining up with a local software firm to launch a ride-hailing company to take on Uber as it seeks new sources of revenue, its chief executive said.
Safaricom, which is 40% owned by Britain’s Vodafone (VOD), and Nairobi-based software developer Craft Silicon will launch the app called Littlecabs in the next three weeks, Safaricom CEO Bob Collymore told Reuters in an interview.
“It is effectively a rival for Uber,” he said. “It is a local competitor which will be cheaper and better for the local community.”
Uber operates in several African countries, including Kenya, where it launched in early 2015, drawing customers by offering lower prices and cutting out haggling over fares. But regular taxi drivers have complained about its impact on business.
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In March, the Kenyan authorities charged six men with attempted murder and malicious damage to property over an attack on an Uber taxi driver in February.
Safaricom will help develop the application, offer the network connectivity, put Wi-Fi in vehicles that will be signed up on Littlecabs, and use its mobile-phone based financial service M-Pesa to process payments, Collymore said.
Safaricom remains focused on its core businesses of offering calls, texts, Internet access, and M-Pesa but Collymore said it was seeking new sources of revenue.
“The direction of the company is to become a platform,” he said, citing partnerships with local banks that use M-Pesa to lend money on mobile phones.
Safaricom has had a three-year partnership with M-Kopa, a company that connects customers to solar electricity, and is about to invest in a firm involved in education and another that helps job seekers, Collymore said.
“When M-Pesa was launched it wasn’t launched as a big thing. It was just launched as a thing that was right in the edge. Now it is 20% of (Safaricom’s) revenue,” he said.
Littlecabs is unlikely to grow to that level but would offer a new revenue source and develop skills in the local community, he said.
“It is not a question of who is right and who is wrong; these pictures are not helpful for investments,” he said.